Despite the fall in its share price recently, AIM-listed miner Frontier, which is focused on Kazakhstan and Russia, shows no sign of being downhearted. Indeed it has lots to look forward to in 2011, as CEO Erlan Sagadiev told Proactive Investors.

These are uncertain times for investors. They are plagued by doubts about the scale and strength of recovery and haunted by what could unfold if the powder-keg that is the Middle East explodes.

Against this backdrop the performance of the FTSE 100 has been remarkably resilient.

Where things become a little more difficult is when we drop down a couple of divisions to the small-caps.

Here the worries seem to have sparked irrational bouts of selling. Okay, the AIM 100 Index of growth stocks is down just over 5 per cent in the past three months.

But this tells only half the story, and there have been some huge swings in between that have taken it below the 3,900 level and back above 4,200.

And the pain is being felt most acutely in the mining sector, which has been hit by a double whammy.

Glencore’s £39 billion float has sucked out a lot of cash that might normally trickle down to the minnows, while there is also the nagging doubt that the boom times might be over for the diggers.

One such victim of the investor exodus is the Kazakhstan-focused Frontier Mining (LON:FML), which has seen its share price drop significantly since the beginning of the year - from around 7.5 pence at the beginning of February now at the 4 pence mark.

But with a positive recent report about the company's flagship Benkala copper project and a buzz of progression about the firm, has the market got the vibe right?

Indeed, CEO Erlan Sagadiev said the firm had been forwarded a list of more than 30 companies which had lost more than 45 percent of their value between early January and early May.

"It was a trend in the market which has nothing to do with Frontier Mining or any of these companies," he assured Proactive Investors.

"I hope the markets are coming back and will appreciate the progress we have made this year so far.”However Sagadiev is not ruling out a share buy-back programme if the price remains stubbornly low.

But he added that if the group had any spare cash, Frontier should ideally be pumping it into its projects rather than back to investors.

"This cash can come from the sale of the assets or raising long term debt," he said.Frontier, which operates in Kazakhstan and Russia, this month released a highly positive pit study for the "potentially transformational" Benkala copper project.

Initial copper production at Benkala in the north-west of the country is planned for the third quarter of 2011.

A recent open pit study estimated the mineable oxide reserve and stated that the total proven and probable ore was 30,506 kilotonnes with total copper ore at 159,153 tonnes. The overall grade of the proven and probable ore was 0.52 percent.

Based on these reserves, Benkala has a mine life of seven years, with appropriate ramp-up in production in the first two years.

The study targeted full operational capacity of 18,000 tonnes of copper each year.

Sagadiev said Benkala was definitely the company's main priority at the moment: "We will focus on starting up Benkala production.

“Once it is up and running we will worry about other deposits.

“The gold production comes along the schedule, so things are fine," he said on the company's progress.”

He did say that additional funds would be needed to finish and expand the Benkala plant and that the firm already had sources - which were 'non-dilutive' - at least not at the current share price.

Sagadiev envisages the Benkala mine starting with 10,000 tons per capacity and growing it to 20,000 or 30,000 tons per year using the cash that the project will generate. It would take up to 2013-2014 to achieve that, he said.An added bonus is that Frontier has recently seized full control of Benkala by merging with its partner Coville Intercorp.It is a move which the CEO Sagadiev said had eliminated the risk of the partnership."It is always better to own 100 percent," he added.

"From the management standpoint we will be having the Coville mining team work Baitemir and other deposits which is very good for Frontier."

The other operation in Kazakhastan is Naimanjal, a copper-gold project.

Baitemir is one of the four areas the company is pursuing in Naimanjal in the north east of Kazakhstan and it is a developing copper project.

Here the firm also has the gold producing mine Koskuduk, Beschoku - a copper/gold prospect and Yubileiny - a copper/gold prospect.

As Benkala heads towards potential production, Sagadiev said that a key decision this year will be made on the future of the firm's gold assets.

The company owns the Maminskoye prospect in the southern Ural region of Russia, which is open pittable, with recoveries of up 90 per cent and which carries a net present value of US$110 million.

"We can sell it, we can spin it into another company or we can develop it inside Frontier Mining," he said.

"We do understand that we will probably not get a fair valuation for gold assts or operations being in Frontier Mining. But the gold prices are high and we will be making some good money operating those. I believe in 2011 we will make some key decisions."

He added that he was confident about Frontier's progress and revealed that talks were going well with potential off-take agreement partners for the copper from Benkala and th associated gold

Sagadiev said: "It is all very advanced. We will not to undersell it. But you will be hearing very soon.”

“We believe the planned development of the Miraflores gold mine will provide the backbone for transforming the company"

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Frontier Mining Limited is a copper exploration and development company with a focus on Kazakhstan. The Company’s main activity is the Benkala Copper Project in North West Kazakhstan, which forms part of the Urals copper gold ore belt. Frontier has a 100%...

Frontier Mining Limited is a copper exploration and development company with a focus on Kazakhstan. The Company’s main activity is the Benkala Copper Project in North West Kazakhstan, which forms part of the Urals copper gold ore belt. Frontier has a 100% interest in Benkala through its subsidiary KazCopper LLP

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